Fujitsu: No Chances to Merge Hard Drive Businesses with Western Digital

The president of Fujitsu said in an interview that now there is zero chance that the company’s hard disk drive (HDD) business would be sold to Western Digital. Although the unit is believed to be losing money, WD is unlikely to offer proper price due to strong Japanese Yen.

“I won’t deny that we have had talks with Western Digital. But at the moment, there is zero chance of a deal,” said Fujitsu President Kuniaki Nozoe in an interview with Japanese Nikkei news-paper, reports Reuters news-agency.

Back in October ’08 Western Digital was rumored to be planning to acquire Fujitsu’s HDD business unit along with plants in Japan, the Philippines and Thailand for ¥70 billion to ¥100 billion, which was from US$661 million to US$944 million at the time. At present, the actual price of Fujitsu’s HDD business unit would be from US$775.6 million to US$1.108 billion, which is considerably higher. However, it is claimed that WD turned down the offering to acquire the hard drive unit even for ¥50 billion (about US$554 million).

Recently Western Digital said that that as a result of softer demand for its products it would have to take a series of actions in order to reduce its operating costs. Among those actions, WD will have to cut down production of hard drives as well as headcount and also lower capital spending.

“In the current macro economic climate, we expect demand weakness to last well into the middle of the 2009 calendar year. Consequently, we are taking additional steps to immediately reduce production capacity and operating expenses on a longer-term basis across our entire business as we approach the seasonally weaker second half of our fiscal year,” said president and chief executive officer of WD John Coyne at the time.

WD did not comment on its talks with Fujitsu.

“We are taking these actions in order to strengthen our financial position and enhance the ability of our business to withstand an extended period of depressed demand while continuing to invest in the technologies, products and processes required to assure the continued success of our business,” Mr. Coyne added.